- Y Diweddaraf sydd Ar Gael (Diwygiedig)
- Pwynt Penodol mewn Amser (01/06/1992)
- Gwreiddiol (Fel y'i Deddfwyd)
Version Superseded: 01/01/1993
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Building Societies Act 1986, Section 45 is up to date with all changes known to be in force on or before 11 September 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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(1)If it appears to the Commission that there has been or is, on the part of a building society or its directors, a failure to satisfy any one or more of the following criteria of prudent management, it shall be entitled to assume for the purposes of its relevant prudential powers that the failure is such as to prejudice the security of the investments of shareholders or depositors.
(2)The prudential powers relevant for the purposes of this section are its powers—
(a)under section 42, to impose conditions on a society’s authorisation, and
(b)under section 43, to revoke a society’s authorisation,
by reference to its expedience for the protection of the investments of shareholders or depositors.
(3)For the purposes of this Act, the criteria of prudent management are—
1.Maintenance of adequate reserves and other designated capital resources.
2.Maintenance of a structure of commercial assets which satisfies the requirements of Part III.
3.Maintenance of adequate assets in liquid form.
4.Maintenance of the requisite arrangements for assessing the adequacy of securities for advances secured on land.
5.Maintenance of the requisite accounting records and systems of control of business and of inspection and report.
6.Direction and management—
(a)by a sufficient number of persons who are fit and proper to be directors or, as the case may be, officers, in their respective positions,
(b)conducted by them with prudence and integrity.
7.Conduct of the business with adequate professional skills.
(4)Nothing in this section implies that it is improper for a determination for any purpose of the Commission’s relevant prudential powers to take account of other factors than the criteria in subsection (3) above.
(5)The Commission, with the consent of the Treasury, may, by order in a statutory instrument, specify descriptions of capital resources of building societies which, for the purpose of the first criterion in subsection (3) above, are to be aggregated with reserves for that purpose, to the extent and subject to any conditions specified in the order.
(6)An instrument containing an order under subsection (5) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(7)A failure to satisfy any of the first five criteria in subsection (3) above shall be treated, for the purposes of this section, as a failure on the part of a society’s directors prudently to conduct the affairs of the society.
(8)A failure on the part of the society to comply with the conditions to which the authorisation is subject shall be treated, for the purposes of this section, as a failure on the part of the society’s directors prudently to conduct the affairs of the society.
(9)Any carrying on by a building society or its subsidiary of an activity which has been determined, whether by the Commission under section 38 or by any court, to have been beyond the powers of the society shall be treated, for the purposes of this section, as a failure on the part of the society’s directors prudently to conduct the affairs of the society.
(10)The following provisions apply for the interpretation of the list of criteria in subsection (3) above in their application to a building society, that is to say—
“adequate”, except with reference to liquidity, means adequate having regard to the range and scale of the society’s business;
“adequate", with reference to liquidity, means of such proportion and composition as is required by section 21(1) and “liquid form”, in relation to assets, means assets which are of an authorised character for the purposes of that subsection;
“business” includes business the society proposes to carry on and references to the business of the society include, where other bodies are associated with it, references to the business of those associated bodies;
“requisite", with reference to the arrangements for assessing the adequacy of securities, means such as are required by section 13;
“requisite", with reference to accounting records and systems of control, means such as are required by section 71;
“sufficient", with reference to the number of directors and officers, means sufficient having regard to the range and scale of the society’s business.
Subordinate Legislation Made
P1S. 45(5) power exercised by S.I.1991/702
Modifications etc. (not altering text)
C1S. 45 extended (temp.) by S.I. 1986/2168, art. 12(2)(c)
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